Bank of Japan maintains rate at 1.25%, yen rises for third consecutive time

The Bank of Japan kept its benchmark interest rate at 1.25% while raising its inflation forecasts. Following the announcement, the yen strengthened, reaching a high of 157 units per dollar, and is on track to close October with a 0.2% improvement. The BoJ's decision comes in a context where the European Central Bank, the Federal Reserve of the United States, and the Reserve Bank of New Zealand also chose to keep their rates unchanged. Monetary authorities expect a more favorable scenario for cuts due to persistent inflation and restrictive financial conditions. Volatility on Wall Street has led to an increase in demand for safe-haven assets, although investors have avoided the dollar. Market attention will focus next week on the Bank of England and the Reserve Bank of Australia, whose interest rate decisions will be key. Khoon Goh, strategist at ANZ, indicated that the global tightening cycle will continue, which will continue to affect currency markets.

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